Timber harvest

Anyone have experience with selling timber? I recently inherited some land and I need advice. SE Minnesota. Thank you.

I have no personal experience, but I have attended a few forestry classes, and read up on timber harvest practices a little bit.

Be patient, and seek multiple angles of approach.

The first step you should take is to contact your state forestry department. They should be able to advise you throughout the entire process. There is likely a group of "consulting foresters" who are private individuals that work with the logging companies to ensure you get what you want out of the endeavor, money wise and land preservation wise. There are also wildlife biologists that should be working under a state agency that can assess the area prior to logging, to make you aware of anything that might be worth avoiding damage to (sensitive area of endangered plants, etc).

Contact...

-State dept of forestry
-Consulting forester
-Wildlife biologist

Consider...

-On-contour logging paths as mush as possible to prevent future erosion
-Silt-fence installed to protect waterways during the process
-Leaving some old-growth trees
-Planting of seedling native species in areas logged
-Special care when planning the roads (they may be wide enough for equipment to pass, but when skidding out long logs they will drag the base of existing trees and damage them, which can lead to premature death).

Thank you for your advice, this information will be of great assistance!

I’ve sold timber to loggers many times and sometimes it worked well, and other times not.

The best of times was when an old logger came in, brought me quite a bit of money and left the land in better shape then when he arrived. The worst case was having to go to court (twice) to get the money for my stolen wood.

I got some time so please let me explain in better detail...

Where I live there are generally two types of forest sales, the first is where you have a forester come in, figure out a harvesting plan, and volume of wood to be removed. From that they will give you a price on what the wood is worth, and then it goes out to bid for logging contractors he typically works with. They will submit bids, and then the winning bid will be the highest, and they will cut you a check for 10 to 25 percent of the total amount beforehand, and then start cutting. From that sale of wood, the forester will take his cut out of what you get.

The second way is that you get a logger in who pays you by whatever is cut. Typically, here you get paid 1/3 for whatever it is the going rate for pulpwood, and half what sawlogs go for.

The great thing about the first is; a forester does most of the work for you, sets everything up, and kind of manages everything. Since it is a bid deal, if the price of wood goes down between sealed bid and wood rolling to the mill; you make out well. The downsides though are the opposite. If the price of the wood goes up, you get what the sealed bid said you would, and the logger makes out better, Naturally the elephant in the room on this is the forester; they must get paid, and its a lot. So much of your potential wood money goes into a middleman's hands.

The second way dispenses with the forester, but again, the greater the risk, the greater the reward. There has to be a lot of trust with the logger, but if they are honest, you will do a lot better. It does not matter if the price of wood goes up and down, you will get either one third or half based upon that woods price. You'll get the tickets for each load hauled, and can verify the tonnage/board feet hauled, and can do the math and make sure your correctly being paid.

Either way, don't expect to get rich.

Off the top of my head, last time I think I had 72 truckloads of wood cut (1300 cord), both sawlogs and pulp and made $18,000 using the second method.

Generally, the landowner gets screwed, but its all based on time. For us landowners, it takes 35 years to grow a marketable tree, so that is a lot of paid taxes to get there. With a recovery rate of about half a cord of wood produced, per acre, per year, sustainably, the current cost of property taxes is about the same as the value of the timber being grown. For you, you have very little time owning the woodlot so your income will seem high because you have not paid much taxes, but in reality you are just taking money out of the woodlot right up front, and will then be paying the property taxes on the backend for years.

From a business standpoint, cutting the wood off, and then selling the harvested land makes the most sense fiscally... if it can be sold that way that is.  Its called "stump and dump" and a pretty common practice. The longer you keep the land, the more money is ultimately coming out of that timber harvest since you took the value out of the forest from the onset. It will eventually retain its former value as the wood grows into marketable timber, but that will take at least 15 years.

Myself, I have owned acreage all my life and harvested wood in every way possible I think. I used to like to sit on woodlots as long as possible, cutting wood MYSELF instead of a logger, to get the most money per cord or per thousand board feet. With that I could cut a few loads of wood, and pay my taxes every year and be out in the woods having fun. And of course if something did ever happen, I could always sell my wood and pay for whatever suddenly came up. But its changed, and it has to do with property taxes; they are high!

My suggestion to you is, if you can pay the property taxes, and are in good physical condition... wait. Its just money in the bank buddy because money does grow on trees. No one can predict the future, and I can say, I never expected to get three different types of cancer at 42 years old, but I am sure glad I had a woodlot to get me through those rough years. But if you sell your timber off now, and you need money down the road... you'll have nothing but small trees and stumps to look at, and no logger will want to come in and harvest those for you.

Oh I fully understand...

In the United States, only 15% of the people have over $1000 in the bank. That means out of 100 people you meet, 85 of them are broke. To inherent land with wood means the wood can be sold off and big money to be made. I mean look at the cost of a 2x4... $4. Surely a forest is worth millions... right?

It does not work quite that way. Like everything, it depends, but there is more than enough loggers to try and let people think that. These new landowners have also not paid years of taxes and don't realize how quickly those high tax bills are due again.

So loggers tell landowners "its been neglected for years and really needs to be cut". To some degree that can be true, but nature takes care of itself, and while we can help it along, no wood lot HAS TO BE cut. That is just not true. So the loggers go in, the landowner all glassy eyed on the money they will make, not realizing the broker, the truckdriver, the logger, all get a cut of the profits of the landowners wood, so they don't end up with as much as they thought they would. They also do not realize how much a hole in the forest a taken tree leaves behind. Considering it takes a hundred just to make a load, that means the forest has a pretty good scar when the loggers leave because with so much money in equipment, they are not just coming in and grabbing a few trees. To make it work for them, they are grabbing a LOT of trees.

Years ago I would watch land be logged after it had been left for 30 years. Then it was 15. Now its like 10. Landowners just need the money to pay the taxes and loggers and papermills are willing to take smaller wood. So a thinned woodlot that is just starting to get growing, is whacked down again, and its really sad because its all based on people not managing their money. Whether it be from a school system here that does not care what their costs are for local taxpayers, to individuals that cannot seem to get a grip on their own finances. Its just plain runaway spending and the poor woodlot is seen as away to make quick money, and is pilfered much too quickly.

As for waiting... who wants to wait? Cut it now, take the money, pay off this debt because someone wanted tis gismo now and could not wait till they had the money saved for it and instead bought it on credit. With this mindset there is always a financial crisis so why wait for a worse one to come along.

This is the mindset we now have, and the woodlot really pays the price for it.

So I mentioned "Stump and Dump", but other than a snazzy saying, what really is it, and why is it so prevalent?

Its pretty simple how it works, it just takes a lot of money constantly be moved, and a lot of forested land. As an example I will use a 30 acre piece that had this done by me last fall as it is very typical of a stump and dump.

Basically a logger will see a piece of land for sale that has good wood on it, old growth forest or at least very mature wood that has not been logged in the past 30-60 years. The example is 30 acres of old growth forest filled with hardwood trees of huge size. So a logger bought the 30 acres for $55,000. He cuts most of the wood off it, and probably made $40,000 just on the sale of the wood because he is logger, trucker and landowner, so he gets all the profit. So he is -$15,000, but only for the moment.

Then he turns around and sells the land for $50,000. So he is ahead $35,000 and can now buy more land and do the same thing again.

The problem with all this is, with so many loggers doing this, and it taking so much land to do, land is constantly being bought and sold. It also artificially inflates the value of the land because it is no longer valued for the wood on it, but rather just the land itself. I mean it got sold for $55,000 with old growth forest on it, and resold without wood for $50,000 so what difference does it make to the bank financing the sale, what a piece has for wood? And with so many people wanting land, it will be resold no matter how denuded the forest is.

Well, if they have the money that is...

Banks are not going to finance larger tracts of land to the average person. They know that if they do loan money for this land, the landowner will put a house on it, and then in a few years, split off the house and two acres, and then sell the rest of the land. I mean, what good is 28 acres of denuded forest to the average landowner. Its too much for them, so they sell off 28 acres, and pay down their own mortgage leaving the banks without interest. This means they lose money, so unless the person is financially sound (and 85% of Americans are broke), they won't lend money for anything over 5 acres.

So really in the end society loses with stump and dump.

No mature forests
Devalued land
Banks unwilling to finance larger tracts of land
People paying high taxes on useless land
People accepting cut over land as being normal

Steve, your last two posts were an excellent description of the problems of current logging in the US. I live in East Central Minnesota and have seen beautiful acreage turned into clear-cut stumpage.
We own the only large acreage left as it has been for the last 100 or more years. Almost everything around us for tens of square miles has been logged, most of it clear cuts, or what the DNR calls managed, which usually means managed for the paper, and hardwood Mills. Most of the land around us is covered with Aspen suckers that a person can barely walk through, and will have almost no commercial value, and worse yet,no scenic value for probably 50 to 100 years.
I hope your message is appreciated by those who read this post.

I am finding the information interesting.
Thank you

Good insights and information. I'm not planning to go out and clear cut my forest for the money to pay my property taxes (although sometimes clear cutting is actually the healthiest thing to do). We do generate enough income from renting to a farmer to cover those. No trees on the property have ever been harvested for sale, at least not in the last 50 years. The forest is not as healthy as it could be and will be after some logging is done. I hope no one here assumes all logging is evil no matter what. Sustainable logging is the second best thing for the health of a forest, after fire. But we suppress fires. And by the way, we all use wood products and it has to come from somewhere.